CPI inflation April 2026: Prices rose 3.8% annually

Prices that consumers pay for a wide range of goods and services increased at a faster-than-expected pace in April, as another burst in energy prices raised further concerns about inflation’s impact on the U.S. economy.

The consumer price index rose at a seasonally adjusted 0.6% for the month, putting the one-year pace at 3.8%, the Bureau of Labor Statistics reported Tuesday. The monthly rate was as forecast, but the annual rate was 0.1 percentage point above the Dow Jones consensus.

Excluding food and energy, the core CPI increased 0.4% and 2.8%, respectively, keeping inflation well above the Federal Reserve’s 2% goal as the monthly rate was the highest since January 2025. Fed officials consider core a better indicator of longer-term inflation trends.

The annual headline inflation rate was the highest since May 2023 and was up half a percentage point from March. Core inflation rose 0.2 percentage point annually.

Energy prices, which jumped 3.8%, accounted for more than 40% of the headline gain, while food prices also climbed 0.5%. For energy, that put the 12-month gain at 17.9%, while food was up 3.2%. The gasoline index increased 28.4% annually. Food at home prices increased 0.7%, the biggest monthly gain since August 2022.

Though energy and in particular gasoline has been much of the headline story, inflation pressures also came from a variety of other areas.

Shelter costs rose 0.6% after easing in prior months, indicating that inflation is a problem beyond the Iran war impacts. The tariff-sensitive apparel category increased 0.6% and airline fares accelerated 2.8%, putting the 12-month gain at 20.7%. Tariffs also seemed to hit other areas, with household furnishings and operations up 0.7%.

New vehicle prices fell 0.2% while the index for used cars and trucks was flat. Medical care costs decreased 0.1% and hospital services were down 0.3%. Health insurance also declined 0.4%, while motor vehicle insurance increased 0.1%.

The report also contained bad news for workers, as real average hourly wages slipped 0.5% for the month and fell 0.3% annually.

Stock market futures were negative following the report while Treasury yields were higher. Traders also raised the odds for a Fed rate hike by the end of the year to about 30%, according to CME Group data.

“Inflation is the key drag on the U.S. economy now,” said Heather Long, chief economist at Navy Federal Credit Union. “This is hurting Americans. There is a real financial squeeze underway. For the first time in three years, inflation is eating up all wage gains. This is a setback for middle-class and lower-income households and they know it.”

The latest inflation news comes at a crossroads for the Fed, which has kept its benchmark interest rate steady all year amid misgivings among policymakers both on where the central bank should be heading and how it should communicate its intentions.

In late April, the Fed voted again to hold but saw four dissents, the highest since 1992. Fed Governor Stephen Miran…